MUNICIPAL CORPORATION OF DELHI versus M/S. TRIGON INVESTMENT AND TRADING PRIVATE LTD. AND ANR.

Citation: [1996] 3 S.C.R. 1158 · Decided: 03-04-1996 · Supreme Court of India · Bench: B.P. JEEVAN REDDY · Disposal: Appeal(s) allowed

Judgment (excerpt)

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MUNICIPAL CORPORATION OF DELHI 
v. 
M/S. TRIGON INVESTMENT AND 
TRADING PRIVATE LTD. AND ANR. 
APRIL 3, 1996 
[B.P. JEEVAN REDDY AND KS. PARIPOORNAN, .TJ.] 
Delhi Municipal Cmzwrarion Act, 1957 : Sections 2(37), 126, 128( 1) 
and (4). 
Property ta;.-Building transferred to a person and possession 
given-No sale deed was e.xecuted-Held : such a person was transferee as 
well as ow1w-Hence liable to pay property tax even for pe1iod anterior to 
transfel'"-Absence of notice-Plea of-Not available to transferee. 
Prope1ty ta:..-Intimation of transfer from parties-Absence of-Liability. 
for entire outstanding prope1ty tax-Fixed 011 transferee after issue of call 
letters and notice-Held: liability to pay outstanding prope1ty tax fixed 1ightly 
on transferee. 
Pmpe1ty ta:..-Assessment validly made--Piior to issue of call letters to 
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transfere~eld: would continue to be valid despite no notice to transferee. 
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Word< and Phrases : 
"Owner''-Meaning of-Jn the context of Section 128 of the Delhi 
Municipal Cm)'oration Act, 1957. 
The respondent-purchaser was allotted flats in a multi-storeyed 
building for full consideration. Neither the builder nor the respondent 
intimated the appellant-Corporation of the said allotment or of the 
delivery of possession. The assessing officer of tlu: appellant-Corporation 
after issuing a call letter and notice, fixed the liability of payment of 
G property tax on the respondent-purchaser. The respondent addressed a 
letter to the assessing oflicer asking for rectification of the afore-said 
order. As no action was taken on its rectification application the respon-
dent tiled an appeal before the District Judge which was allowed. There-
upon, the appellant tiled a writ petition in the High Court, which was 
H dismissed. Aggrieved by the High Court's Judgment the appellant 
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M.C.D. v. TRIGON INVESTMENT 
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preferred the present appeal. 
On behalf of the res1iondent, relying upon the definition of the 
expression "Owner" in Section 2(37) of the Delhi Municipal Corporation 
Act, 1957, it was contended that no assessment of property tax could be 
made U]Jon it without a notice under Section 126 of the Act and in no event 
could it be made liable to pay property tax for the period anterior to the 
senrice of such notice. 
Allowing the appeal, this Court 
HELD : 1.1. The words "but nothing in this section shall be held to 
affect the liability of the transferee for the payment of the said tax" in 
Section 128(4) of the Delhi Municipal Corporation Act, 1957 have to be 
understood in the light of the preceding provisions, viz., that the levy of 
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the property tax is upon the lands and buildings, that the said tax con-
stitutes the first charge upon such lands and buildings and that while the 
liability to pay tax lies upon the transferor, the transferee is not freed from D 
the said liability on that account. The expression "transfer" is not defined 
in the Act. Therefore, it has to be understood in its norntal sense, i.e., in 
the sense it is understood in the Transl'er of Property Act but with the rider 
that Section 128(1) of the Act recognises a transfer, even where the 
instrument of transfer is not registered. (1170-E-H] 
1.2. The fact that possession of the flats was delivered to the respon-
dent, that the respondent has paid the full consideration for the said flats 
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and the further fact that the respondent has let out the flats and is in 
exclusive receipt of the rent clearly establishes that he is a transferee 
within the meaning of Section 128 of the Act. Indeed, he would be the F 
"owner" as defined by Section 2(37) of the Act. He would be the "owner" 
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within the meaning of and for the purposes of the Act- whatever may be 
the position in general law. In that sense, the respondent is equally liable 
to pay the said taxes. (1170-H, 1171-A-B] 
1.3. The liability of the transferee to pay the property tax arises from G 
the fact of his being the "owner" of the concerned land or building shou•d 
not be mixed up or confused with the proviso to Section 126(1) of the Act. 
Since the property tax constitutes first charge upon the land/building and 
because the land/building is fastened with this liability, the liability travels 
witb the land/building. The transferee is liable to pay the property tax due H 
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SUPREME COURT REPORTS 
[1996] 3 S.C.R. 
A thereon not only for the period snbset(Uent to transfer in his f'arnur hut even 
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